>> exciting new year's eve. iowa proving to be a fight to the finish. welcome to a brand-new hour of america's news headquarters. i'm arthel neville. >> i'm rick folbaum. nice to be with you. and happy new year, everybody. with just three days to go until the iowa caucuses, the latest real clear politics average of all the polls that are out there showing a tightening race, mitt romney in a virtual tie with ron paul. our chief political correspondent, carl cameron is on the campaign trail. he is live in iowa. nice to see you. so three days until the caucuses. what are we watching for?

>> one of the things we have to really pay close attention to, because it's new year's eve, and there isn't going to be a lot of campaigning in the next 12 hours, is what happens tomorrow morning. in fact, we've been saying for the last year and a half, it is a herbal fact that half, even more than that of iowa caucus goers are accept described christian conservatives. church tomorrow morning is a very big deal and pastors across the state are known to engage in a little bit of politics from the pulpit just before the caucuses and that many of them have already picked up sides. rick santorum, for instance s expecting as many as two dozen pastors to mention his name in some of the biggest mega churches across iowa tomorrow. some of the congregations exceed a couple thousand people. that's big opportunity for through his proxy supporting pastor, somebody like rick santorum to get a lot of buzz going before the caucuses. he was here a short time ago and he talked at some length about how he hopes that people will choose a leading position, ignore the polls polls and taket seriously. he's not the only candidate seeking to serve to coalesce the

religious conservative. you've got rick perry, texas governor who has been working very hard for christian conservatives and has a big ad blitz that's been on the air for a month talk being his faith. newt gingrich, who has won the endorsement of influential christian conservatives in the last couple of days. and michelle bachmann, who was the winner of the ames straw poll and has had a really tough time in the polls and raising money of late. but quite popular with evangelical conservatives. all are vying for the christian conservative vote. what happens in the churches tomorrow could help persuade voters about that. and if the christian conservative vote in iowa coalesces behind one candidate, look out. mitt romney and ron paul could be facing a real upset. >> real leadership is not from me. it's prosecute you. what we've seen in the polls happen is because iowans had gone down and we can look at our web site, it's overwhelming from iowa. iowa is not the biggest state in the country, yet, we have had more people visit our web site from iowa than any other place. why?

you're doing your homework. you're making your decisions. you're doing what you're supposed to do. and i'm sure you're doing it for all -- how many folks have seen other candidate sos far in this process? well over half the people here. that's your job. now your job is to decide. don't defer. >> and they will on tuesday night. they're expecting 120 to 130,000 to show up. it's tiny sliver of the population. it's not about 15% of the republican registered voting here in iowa. yet, these are some of the most sophisticated voters in the country. they've had the opportunity to look at the candidate, to hear them, to question them, to grill them. to watch them in some cases make mistakes and many cases, recover from that. so we'll find out and we should point out, this is the race to the starting line. all 50 states get a crack at these candidates to vote and have primaries. iowa is the first and one of the most influential. but it goes to new hampshire a week later and the balance of resumes anew in a whole

different kind of voter. >> we still have to worry about iowa on tuesday. and if those religious conservative voters that you were talking about do not decide the winner, carl, where does that leave mitt romney and ron paul? >> in very good shape, as a matter of fact. both romney and paul recognize that a big part of their success in the polls is because the christian conservative is divided among the other choices. romney has not been courting them aggressively. he has been essentially running a business, job, economy-oriented candidacy. but in many views, in many minds, he's unreliable on those, having been pro choice as recently as five, and changed his position on some of the core social issues that matter to religious conservatives. in the case of ron paul, he has been soaring in the polls and has a legitimately strong organization, but mr. paul has found himself absolutely pummeled by his rivals for a whole host of things. legalization of drugs, but more

importantly, his view in the minds of his rivals, that it's okay that iran get nuclear weapons and they say it's out of step with the gop. paul is under fire. it will be more difficult for him to prevail in iowa based upon the beating he's taken. mitt romney is in pretty good shape, but again, if christian conservatives coalesce behind one t could be a new ball game tuesday night. >> carl cameron, the best to you and your family and fox news is your home pace for the iowa caucuses. tomorrow night, 8:00 p.m. eastern time. america's election headquarters special, previewing tuesday's race live from iowa hosted by bret baier, who is on his way to the state right now, and megyn kelly. plus we'll have special coverage of the caucuses this tuesday beginning at 6:00 p.m. eastern time right here on fox news channel. >> president obama is in hawaii spending some quality time with his family this new year. but he's also preparing to spend much of 2012 on the campaign trail. what can we expect from the president once he heads back

to washington? doug is not in washington. he's live in honolulu. hello, doug. >> hello. not a bad place to be. you hear about all the back and forth that carl just described. so far, the president has been happy to watch all of that play out, watch these republicans beat up one another and really kind of stay above it all. next year he will have to enter the fray and we got an idea from white house official how he sees this all playing out. the campaign will begin in full force later in 2012. the president plans to cop traditions himself with congress, kind of a no brainer given the fact that congress' approval ratings are lower than the president. he will again describe himself as a warrior to the middle class and during this morning's weekly media address, he offered a list of his accomplishments. >> we ended one war and began to wind down another. we dealt a crippling blow to al-qaeda and made america more secure. we stood by our friends ask allies around the world through natural disasters and

revolutions. we began to see signs of economic recovery here at home, even as too many americans are still struggling to get ahead. >> the president is struggling to finish up last-minute business. today, in fact, he just signed into law the national defense authorization act which is a huge $662 billion measure that authorized funding for everything from the war in afghanistan to new weapons program for the pentagon, all kinds of things. it also specifies how a terrorist detainees are treated in the united states. the president issued what's called a signing statement, kind of giving his opinion as to how he plans to interpret those positions and that is something that is not going to sit too well with republicans heading into 2012. arthel. >> doug, happy new year to you and your family. >> happy new year. new violence in syria as record crowds turn out in new

protests across the country. we have brand-new video of some of the demonstrations that took place friday and you can hear gun fire in the background if you listen as police are using water cannons to try to break up the crowds. activists say at least 22 people were killed. the violence showing no sign of letting up despite the presence of monitors from the arab league who were there to insure syria's government ends their bloody crackdown. and major new developments out of iran today after a pair of controversial promises turn out to be more bark than bite. tehran pulling the plug on a long-range missile test and denying rumors that they would shut down a major shipping route. in fact, a top expert even discussed iran's plan for a six-party nuclear talks. feel it might be early to celebrate diplomatic victories. doug has more on that. >> good evening. it appears that the threat of new western sanctions against iran is now in conjunction i should say with the presence of three u.s. aircraft carriers

within striking distance of iraq, may have forced them to soften its stance of blocking the strait of hormuz. the first hint of a ship came yesterday when the chief of staff of the iranian navy said that iran can blockade the strait of hormuz any time, but then added, it has no intention of doing so at this point. then today, a scheduled test of an iranian long range missile never happened. following that surprise, the commander of iran's revolutionary guard publish add statement on the guard's web site that read in part, discourse of closing it remains to five years ago. today's debate contains new layers and the time has not yet come to raise them. it was only two days ago that the u.s. state department expressed its belief that the international sanctions were beginning to take a toll on iran >> one can only guess that the international sanctions are beginning to feel the pinch and that the ratcheting up of

pressure, particularly on their oil sector is pinching in a way that is causing them to lash out. >> other factors may have led to this apparent conciliatory tone that iran is taking, earlier, the u.s. announced a big sale of f-15 fighter jets to saudi arabia, 84 jets in all. last night, the u.s. announced the signing of a $3.5 billion deal to sell the united arab emirates a new high altitude missile defense system. so each new act of iranian aggressive posturing appears to be met with a u.s. response to protect iran's regional opponents. rick. >> thank you. doug in washington. >> a travel scare for folks at one texas airport. a suspect taken into f.b.i. custody at midland international airport after going through a checkpoint with some kind of explosives. the airport had to be shut down as bomb squads conducted a full sweep. the explosives were apparently in military grade wrapping. still no word on his identity

and the airport is running again. police in los angeles are look for suspects suspects in af arson attacks. at least nine cars torched early this morning. yesterday there were nearly two dozen fires. police say in almost every case, the fires began in a parked car and given the unusually high number of cases, they say they're not taking any chances. >> our department operations, command has been activated at level one for the city because this is a significant event that's taking place here in the san fernando valley, as well as other parts of the and city, and other parts of hollywood. >> investigators not sure if all of the fires are connected. no arrests so far and no injuries reported. get out your score cards. it's david one, goliath 0 in the battle against cell phone giant verizon. it's the biggest cell phone company in the world, but one day after implementing a new fee

for bill paying, verizon is backing off after a major customer backlash goes what else, viral on the web. julie banderas live in new york. >> hey, that's right. angry customers fed to blogs, and petitions after verizon charge to do charge the $2 bill paying fee for on-line or telephone single payments. 24 hours later, the company's president released the following statement, and i quote, at verizon, we take great care to listen to our customers. based on their input, we believe the best path forward is to encourage customers to take advantage of the best and most efficient options, eliminating the need to institute the fee at this time. unlike airline passengers or bank of america customers who have a choice to walk away if they choose, verizon customers are locked into multi-year contracts. and in this economy, a company with revenue of $15 billion in a most recent quarter that tries to tack on a fee doesn't fly with consumers. >> all these companies are

literally desperate, where can they cut back, where can they cut margin cost sos that they can improve profit as soon as when you can't cut anymore, the only place you're going to get that extra revenue is by tacking it on to the consumer and hoping the consumer doesn't notice. you know with a? we're paying attention. >> what surprised many was how quickly verizon rolled back the fee, considering it took bank of america one month to rescind its plan to charge 5-dollar monthly fee. while experts predict this isn't the last time a corporation, large one like verizon will trio bilk its customer, they say hopefully the collective consumer voice will be able to change the next company's planned fee. >> they'll start thinking twice. thank you. happy new year. >> happy new year to you, too. speak of happy new year, the clock ticking down to midnight in the u.s. it's already 2012 in places like new zealand. look at that. that country, one of the first in the world to celebrate the

new year. this is a scene in hong kong. welcome not guilty 2012 with fireworks over victoria harbor. one of the biggest parties in the world is just getting started in times square, of course. the cross roads of the world already packed with partiers, waiting for the ball to drop. so will the weather cooperate? maria molina is live in the fox news weather center. certainly can't complain that it's too cold outside. >> yeah. can't complain that it's too cold, even for me, i'm from south florida. this feels great. much better than last year. temperatures this time around are about ten degrees warmer than they were for last year's times square celebration. looking good out there. as far as the temperature we're expecting at midnight should be 45. very mild. not that much wind, maybe 5 to 10 miles an hour. we're not really expecting wind chill to be a big issue. just beautiful weather out there with no rain. that's the story pretty much for most across the northeast. for boston, very mild.

philadelphia, as well. clear skies. across south florida, of course, 70 degrees for miami admit night with clear skies. we're not expecting rain there. chicago across the great lakes, things are a little bit tricky for your midnight forecast. there is a storm system approaching. we do think that most of the rain and also the snow will hold off in chicago for your celebration out there and later after midnight, you have to be careful as wehood back home. where we could have big time problems will be in minneapolis. we do have a winter storm warning out there that does extend from 9:00 p.m. through 6:00 a.m. coming up tonight. that basically covers your entire hours out there if you're doing any celebrating. the temperature should be about 35 degrees. we're expecting a lot of snow and a lot of wind. not a lot of snow for their standards, two to four inches, but a lot of wind which could produce blowing and drifting. you could look at dangerous conditions on the roads. otherwise seattle looking good, new orleans, atlanta, d.c and dallas, texas, we're

expecting clear skies and a temperature very pleasant at 55 degrees. so it looks pretty good across most of the country except for the midwest, rick. >> all right. maria, thank you very much. be sure to join maria and others tonight for a fox news channel all american new year hosted by bill hemmer and megyn kelly. live coverage of the party in times square begins at 11:00 p.m. eastern time. ahead in the show, you can send us your new year's greeting. text utext and leave a space, then put in a short greeting and send it to 36288. that means type the word, letter u and text, leave a space, then your message, 36288 and you might see your mental scroll along the bottom of the scream. that's pretty cool. >> i'm going to send i heart rick folbaum. >> there are lots of dos and don'ts on new year's eve. of course you do kiss someone special at midnight. don't drink and drive, of course. there is one don't that you may not be thinking of. but it could really cost you. we'll tell you why you should avoid drunken on-line shopping.

>> it's really a problem. also, a christmas surprise that only a military dad could deliver. how he managed to celebrate with his two young children. >> everything goes well, he's going to be inside the box, the kids are going to open the box and he's going to surprise them it's the perfect time to find great deals on the 4g lte devices you love. like the droid bionic by motorola for $199.99. or the pantech breakout for $49.99. our lowest price ever. get the technology you love, on the network you deserve. and for a limited time, get twice the data for the same low price. verizon. you know, typical alarm clock. i am so glad to get rid of it. just to be able to wake up in the morning on your own. that's a big accomplishment to me.

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>> arthel: time for a quick check of the headlines. police in moscow detaining 60 people protesting against russian prime minister putin. the demonstrators taken into custody because they had not received permission to protest. one or more suspected arsonists suspected of burning dozens of cars in los angeles area. police are trying to determine if the incidents are connected. and excluding terrorism, the

past ten years has been the safest decade for u.s. airliners. a decade earlier, passengers were ten times likely it die while flying on an american plane. >> rick: if you're planning to ring in the new year with some alcoholic drinks, you may want to make sure that your smart phone is hidden away or turned off. not only are people known to make phone calls they might not have made if they were sober or send regrettable text messages or pictures, some people are having a few drinks and then going shopping. taking advantage of the technology offered op smart phones or tablet computers. and not only do on-line retailers know you're doing this, they're cashing in on it. jonathan is the portfolio manager for capital stakes.com. have you already begun your new year celebration? >> i had to get ready for this segment, rick. happy new year to you, to all of our viewers. but yeah, you want to add

shopping to what texting, driving, and i guess i suppose appearing on tv with things you do not want to do when you're under the influence of alcohol. >> rick: thank your camera man for getting rid of the streamers in front of the lens. i knew we were going to be talking about this, so i started to ask friends of mine if they've ever done this. i kid you not, 90% in my very unscientific survey, 90% of my friends said yes, they had made purchases after enjoying a couple of alcoholic beverages. >> i'm sorry, rick. did you say something? [ laughter ] you're right. and that's the danger, rick that, booze, of course lowers your inhibitions and no you with the technology afford by the internet, the world wide web, perhaps you've heard of it, of course, you can click and shop at any time day or n. many retailers are taking advantage of it. >> rick: how are they doing that? >> like target, they're targeting those late night shoppers. that's when people are more likely to be imbibed by sending

out deals in the middle of the night. essentially trio capitalize on their audience. >> rick: unbelievable. talk about consumer confidence, which we all want to see improve if we're going to get out of this rut. i think that a lot of people feel like they've got more confidence after having a couple of drinks. >> absolutely. i think therein lays the danger. i think what people need to do, and many folks now two years plus into the recession have done that. they've gone back to seeing, however, their money as their life and saying, wait a minute. before i click buy on whatever impulse buy it might be, how many hours do i have to work to pay for that? shopping is good, but you want to make rational decisions about where you put your money and booze, as much as we all love it, doesn't always contribute to that in the best way. >> rick: there must be a slight danger torre tailers because i imagine a lot of these purchase that people might not have made otherwise end up getting sent right back and that's probably got to cost some of these

on-line shops for all the returns that they get. >> well, retailers want happy customers more than anything. that's why they're so good at targeting us in terrific ways. the on-line world makes it very efficient. we know on-line shopping now is becoming more and more the dominant way in which people shop. unfortunately, the fact that we can do it, maybe with a glass of merlot in our underwear makes us like toe to do things that we may not have done if we had to walk in the store. it's good time to make a budget and say, i'm going to splurge. but set a limit and don't let the booze come between you and your budget. >> rick: you're creating mental im, jonathan, that i'd rather you stopped doing. >> well, i hope that the image for the economy, rick, is a full one for 2012.

2011 was one of such uncertainty in terms of the economy, but also in terms of the politics here and abroad. let's maybe raise our glasses to more of a calm and more productive 201. >> rick: here, here. i'll drink to that. jonathan with capitalistpig.com. good friend of fox. happy new year to you. thanks for playing along. >> happy new year. >> arthel: a florida family couldn't begin the new year any better. here is the story of the mckinley kids. they were told they had to pick up their gift from the airport because it was too big to mail. the gift, of course, was their dad. first sergeant david mckinley came home earlier than expected and he was more than willing to share in the surprise. look at that. >> to come back and surprise them like this not only with just my family here, but with everyone else, with the crowd clapping and watching. it's a good moment. >> you lost your baby teeth. >> daddy, how did you get here? >> arthel: david's family pooled

their frequent flyer miles together for his ticket after he was shipped home early. >> rick: isn't that nice? what a great surprise. all right. the criteria for becoming president may not be as stiff as you think. why iowa voters say a candidate's personality matters as much if not more than their policies. we'll explain. capital one's new cash rewards card gives you a 50 percent annual bonus. so you earn 50 percent more cash. if you're not satisfied with 50% more cash, send it back! i'll be right here, waiting for it. who wouldn't want more cash? [ insects chirping ] i'll take it. i'll make it rain up in here. [ male announcer ] the new capital one cash rewards card. the card for people who want 50% more cash. what's in your wallet? sorry i'll clean this up. shouldn't have made it rain.

>> rick: time for your new year's eve headlines. north korea announcing an official new year's message. the leadership there promise to go defend the new leader, kim jong-un, to the death. also a man in custody in midland, texas after walking into the airport there armed with explosives. the airport terminal was cleared and it has since been reopened. and pope benedict xvi marking the end of the year with a prayer in saint peter's square, surprising tourists by leaving the pope mobile to walk to the life-size nativity scene there. >> arthel: high pitched, struty, holier than thou, these are some of the descriptions being thrown around as the nation prepares to pick our next president possibly. voters may be talking about policies, but it is clear that politic, personality in politics, personality matters. here now, doug schoen, former clinton pollster and fox news

contributor and matt is a former white house political director under president george w. bush. good to see both of you. >> good to see you. >> arthel: here is a barrage of questions for you. doug, you are first. why does personality matter? should it matter? and tell me some of the traits that you think score better with voters and why. >> well, those are a lot of questions, arthel. i'll trio take them one at a time. first, it does matter because people want to have a sense that the man they're electing president who is not a legislator after all, is somebody they're comfortable with, they believe has the traits of a leader and that's ultimately reflected in personality. i think it should matter because you want to be comfortable with the person who has got their finger literally on the but then and third, when you look at these candidate, they each have distinctive personality traits. i know we'll get there. and they either make or break the candidacy, in my judgment. >> arthel: what do you say,

matt? >> yeah, i think there is a basic presidential test that goes on in the minds of voters. part of its policy, but let's face t all these republicans running, besides ron paul, basically have very similar conservative views on policy. but in a state like iowa, they're getting the chance to look at them up close and personally, look at their spouses and families, ask them questions. they want to take kind of the tepor of the person, the tenor of the candidate. so i think this presidential test, which goes beyond policy. it's a question of can i really see this person? are they the best person to be president? also relates to how they view them as a person. >> arthel: doug, i know you want to get specific and so do i. why don't you pick a candidate and his or her strongest personality trait and tell me if you think it's a winning combination. >> sure. i think mitt romney's strongest personality trait is that he looks and seems presidential. he's dignified. he projects the air of a leader

and he gives you a sense, even if he's a bit reserved and remote, that he's the kind of guy who could be in the oval office. now, whether that's right or wrong, i'll leave to others. but that's the impression i think a lot of voters get. >> arthel: matt, what tutsi? >> i'd say someone like rick santorum, who has taken his whole family into iowa, what he's reinforcing in the minds of voters is that he's reliable and he's someone you can trust. he's the father of all these kids. he's obviously -- has a great relationship with his wife. i think that's a trait that's incredibly important to voters, too, something that can also be said about mitt romney. >> arthel: matt, do you think the candidatefool the peel? can they fake it at this point? >> it's really -- any of white house spent time in iowa can tell you, very hard to fool them. they get to see your very up close, very personal. they get to get right in your face and ask you questions. it's not about tv ad in iowa so much as it is about your ability to really go into neighborhoods and blocks and make your case.

>> arthel: you know, would you say, doug, that is it a particular demographic that personality matters or is it across the board, everybody is checking them out? >> arthel, i think it's across the board. i think people from the youngest voters to the oldest ultimately want to know that the person they're voting for has personality traits and characteristics that make them feel comfortable and make them feel this should be the commander in chief. i think that for a lot of people, just to give you the flip side of the mitt romney issue, the ron paul personality which is more cranky, high pitched, for a lot of people who perhaps don't really see themselves comfortable with mitt romney, may be more out of the main stream themselves, they find ron paul authentic, refreshing, and distinctive. >> arthel: let's pull a couple of becames out of history. doug, i'll stay with us since you worked with former president clinton. what was it about president

clinton's personality that you think that maybe one of these candidates could embody and it would win over the voters? >> well, arthel, president clinton was unique. he was warm, engaging, made you feel like a million bucks, made you feel like there was nobody else in the world. yet you knew he was brilliant. he had a broad breadth and depth of intellect you and knew that he was empathetic, compassionate and caring, but also had the traits of a leader. >> arthel: and matt, if they were going to follow in president george w. bush's personality newspaper steps, if you will, what would they take on? >> i think a lot of it was integrity. the fact is that when he ran in 2000, one of the most important lines in almost every speech was that he was going to restore the honor and dignity to the white house. that was a little bit of a swipe at president clinton. now they're all friends again. but his point was, he was trying to relate to voters and try to

connect to them that they could trust him, that he was the kind of person that could represent the country and make them proud. >> arthel: doug, any final words? >> yeah. i think ultimately what matt is saying holds for either party. democrat or republican. unless you are comfortable with the man and his character, you're not going to vote for him, liberal, moderate, conservative, whatever. and i suspect at the end of the day, we'll have that final judgment about the winner in 2012. >> arthel: because tend of the day, we're all people. got to do the job, but we're all people. good to see both of you. happy new year. >> happy new year. >> rick: how about the character traits that these are people who wake up in the morning and think, i can be president. i should be president of the united states. that blows my mind right there. the republican party in virginia taking a bold step, requiring voters in the super tuesday presidential primary to sign a loyalty oath. it's meant to discourage democrats and independents from voting in the gop contest.

peter doocy reports now from washington. >> as of right now on march 6, super tuesday, republican voters in virginia will have two choices on their primary ballots. mitt romney and ron paul. but before they're even allowed to pull the lever for either, they've got to promise they'll do the same thing in november for the eventual nominee by signing something that says, i, the undersigned, pledge that i intend to support the nominee of the republican party for president. now, if you break this pledge, you won't get hauled off to jail. it's not legally binding. but regardless in the old dominion state, some republicans think this is wreckless. >> why have mandatory voting for someone you never heard of, you don't even know and might not be running for office right now. for the republican party to depart so far from what the founders wanted, i just think it's a mistake. >> but still, this pledge got the unanimous approval of the state election board. they voted 3-0 to implement it and it's very interesting. not long ago, newt gingrich said that if ron paul gets the republican nomination, he won't be able to support him.

well, since gingrich is a virginia resident, if he sticks to his own personal pledge not to back paul, then he'd be clashing with the pledge with his state's gop. now we wait and see what happens on primary day. in washington, peter doocy, fox news. >> rick: peter, thank you very much. and tune in to fox news for complete coverage of the iowa caucus that starts tomorrow night. our coverage does, 8:00 p.m. eastern time. you can catch america's election headquarters special, live in iowa. we've got a preview of tuesday's race hosted by bret baier and megyn kelly, plus we'll have special coverage of the caucuses this tuesday beginning at 6:00 p.m. eastern time right here on fox news channel. >> arthel: december 31, now a national holiday in iraq. prime minister making the declaration during a televised ceremony in baghdad to mark the end of the american military presence there. al-maliki praising iraqis for ousting saddam hussein and ending sectarian violence and urged his people to move forward

in unity as the nation focuses on rebuilding. >> rick: from the withdrawal of the last american troops from iraq to the death of the world's most wanted mass murderer, osama bin laden, 2011 has been a pretty monumental year in the war on terror. what can we expect to see as we head into 2012? joining us now is fox news middle east and terrorism analyst, wally per i the author of "the coming revolution, the struggle for freedom in the middle east." nice to see you. >> nice to sigh. >> rick: bin laden gone. al-awlaki government the propagandaist gone. pretty big gets in 2011, right? >> absolutely. in terms of al-qaeda, what's happening is that on the virtual level we see all the bosses going down. but what's happening on the horizontal level is that we see more franchise opening in yemen, somalia, jihad. in nigeria, africa, come back in

iraq. so it's a very interesting dynamic where we are hitting the upper level, but the lower levels are expanding and that is what we're going to see in 2012. >> rick: we're just about totally out of iraq. another milestone of this past year. what do you think about when you think about the war in iraq? >> well, bringing down saddam hussein, you have a consensus in iraq, that was good thing. us exiting without incidence, that was a good thing. the problem is, have we equipped the iraqis for what is yet to come and has been coming over the past ten days, sectarian violence, and most importantly for us, and for everybody else in the region, iranian influence penetrating iraq, i think that's what we'll see more of in 2012. more of iran in iraq. >> rick: before we get to your predictions for the new year, i want to ask you about the arab spring, which you actually predicted in your book, "the coming revolution ." how big of a story was that? all of those revolutions across the arab world.

>> look, i mean, if you put aside the killing of bin laden, 2011 was about the arab spring. it was about the unexpected for most of us of revolutions bringing down authoritarian leaders, those when were with us, such as mubarak and they were not sympathetic to us, such as gadhafi. but also bring about the issue of unfinished jobs such as the issue in syria where bashar assad is still killing his people. i think the arab spring will stretch into 2012. >> rick: let's continue oarlock ahead. what do you think is the biggest national security threat for the united states as we head into this new year? >> there are three levels of security threats. the one we are seeing right now as we cross into the new year is iran. no doubt about it. the games that they're doing in the gulf, basically they're willingness to -- unwillingness

to stop moving toward the nuke. number two, the different kind of al-qaeda that we're going to be meeting in the region and number three, home grown. let's keep in mind we have encountered over the past year and before that a number of so far good results against the home grown, but they're still around. >> rick: our withdrawal from afghanistan, which is scheduled to take place in this coming year what, will that mean for us? >> it depends how and when and who is going to replace us. if the taliban are going to be replacing us, any kind of a taliban, you're talking about the return of a very dangerous regime in afghanistan. it's not going to stop there, rick. it's going to spill into pakistan. pakistan is already a problematic situation between their own taliban and the regime. so that is a very dangerous situation and aspect, afghanistan and pakistan. >> rick: let me ask you to expand on pakistan because it does seem like there is a shift now in u.s. relations with pakistan. they have been our partner, but there have been rift, most

notably i guess after we went in and got bin laden on their soil without giving them any kind of warning or heads up. what do you predict for u.s.-pakinstani relations in 2012? >> rick, it's all going to be hinging on internal relationship among themselves, between the army that wants more power, or that doesn't want to quit power between the secular government which basically is now being weakened by us withdrawing from the area, and thirdly, the returning influence of the taliban. so at the end of next year, most likely, we're going to see more influence to the military on the one hand and to the taliban on the other hand, a more weaker, central secular government in pakistan. >> rick: israel and the middle east and the peace situation there, anything -- any predictions for you, from you? >> the unfortunate development is that the hamas organization is now being hosted and welcomed in egypt and qatar and many other places. that's going to constitute a problem for the israelis who

consider hamas as a terrorist organization and we are seeing a much weaker palestinian authority. all that indicates that next year we're going to see more influence to the islamist fundamentalists in gaza and less influence to the secular elements among the palestinians. >> rick: when we talk about israel and its relations to other regional countries, most notably iran, do you foresee any conflict as -- does israel trio do anything to stop iran in their nuclear ambitions? >> israel has two clocks. one that goes with us. they will coordinate with us any issue with regard to iran. but it has another clock and that one is its own national security. if they see and are sure that the iranians have the bomb and have the missile which they do have, then the israelis may on their own do an action against the iranians. that's something very risky and they know it. >> rick: we covered a lot of ground. the book is "the coming revolution, the struggle for

freedom in the middle east." thank you. >> thank you and happy new year. >> rick: same to you. >> arthel: that was very, very good. okay. we're switching gears 'cause i know you're getting ready to break out the bubbly tonight. you're not alone. why champagne makers are toasting higher sales this year. plus we are live in times square, the place to be. that's all straight ahead. ♪

>> arthel: we are counting down for sure. are you ready for your new year's celebration? if you are not braving the elements here in times square, exciting place to be, chances are you're preparing to pop some corks and start pouring the bubbly. that's really good news for shame pain makers. it turns out this year, they have plenty to toast. casey stegall live in l.a. with telling us why. hey, casey. >> hey. good to see you. happy new year. i know i have my bottle chilling

in the refrigerator at home. the increased demand for champagne, by the way, is on par with what we're seeing in the luxury market where sales are up double digits for high end brands. and this boost is not just because of holiday sales. it's actually year round. bottles produced in the champagne region of france are the only ones allowed to call themselves champagne. and early figures predict the region shipped close to as many bottles this year as it did during its peak before the recession, around 330 million bottles world wide. they see a trend of people spending more per bottle than they did one year ago. >> through august we were up over 30% and we believe this is a combination of both of a great interest in wine for americans, but also a greater understanding of champagne and seeking to make little moments, celebrate little moments with wine that is uniquely associated with

celebration. >> and americans not the only ones splurging on those big labels. a lot of shipments from france are heading to asia where there has been a particular taste for luxury foreign goods, especially brand names. here in the u.s., the wine seller we spoke with says at his store, americans are opting for bargain bubblyies. >> i think as the economy has forced people to reconsider how they spend their money over the course of the year, they've been looking at more sparkling wine and finding they're getting satisfaction with the quality and not as concerned with what's the label on the bottle. >> keep in mind, while champagne sales are improving, they are not back up to pre-recession figures and i should say, like any good reporter, i did a fair amount of research on the facts that i just reported in this story. >> arthel: you know, no -- i need to know, how much did you spend on your personal bottle of champagne? >> 60 bucks. not bad.

good stuff. >> arthel: i've had it. >> not too bad. >> arthel: i like krug, myself. >> happy new year. >> rick: how much does krug go for? >> arthel: like 120 bucks. >> rick: really? look at you. >> arthel: it's a once year thing. it's celebration. come on. >> rick: i'm not really a champagne kind of guy. >> arthel: who what do you like? >> rick: beer. >> arthel: that's good. happy new year. >> rick: happy new year to you. millions are here in the big apple, just outside our studios here. people are all over midtown manhattan. gathering ready to ring in 2012 at what we call the cross roads of the world and we will take you there live. >> arthel: plus we have video of the latest major city to ring in the new year, as well as some major celebrations all around the world @

♪ sing polly wolly doodle all the day ♪ ♪ hah @

>> arthel: newt gingrich, michelle bachmann, and rick perry all spending their new year's campaigning in iowa, but not the front runners. mitt romney is in new hampshire and ron paul is in his native texas. federal investigators clearing enfamil baby formula of contamination of a rare but dangerous bacterial it's link to do recent cases of an infection that killed one newborn and sickened two others. wal-mart, along with some other retailers, pulled cans of it as a precaution. a possible break in the case of a missing arkansas police dispatcher. investigators found the body near donna's home, police say they're waiting on test results to confirm if it is, in fact, her body.

>> rick: and that was the scene in berlin, germany, as thousands rang in the new year earlier this hour. the german capitol hosting to be what is pleased to be one of the biggest celebrations on earth. the whole town reportedly sold out. experts say this could be one of the best starts for germany in years burks the chancellor there, merkel, warns they still have a tough economic road coming up. berlin not the only place the ball has already dropped. star studded concerts and a massive fireworks display helping 2012 get started in taiwan. look at that. >> arthel: check out russia. the alcohol was banned, boothoses of people crowded red square in moscow. organizers wanted to make sure things didn't get out of hand during their dazzling pyrotechnics display. as we all know, there is really only one ball that folks are waiting to drop. jennifer davis is live in times square. hey, jennifer. >> hi there. they say this is the world, or one of the world's biggest

street parties and it surely feels like it when you're standing out here. i've been here a couple of years and this seems like one of the bigger crowds. they've shut down times square to traffic about 3:00 o'clock. when they did, the pens that they set up with barriers filled up almost instantly here in times square. they stretch nearly 20 blocks all the way become to central park. they've handledded o thousands of balloons. we're doing practice count downs on the hour. lady gaga has done her dress rehearsal. there is plenty to keep folks busy here. once they get in, they are not allowed to leave, no alcohol allowed, no backpacks. they're camping out for a while. but people seem happy to do so. >> arthel: once you get in, you can't get out, huh. >> not at all. not even for a bathroom break. they're hearty souls out here. at least the weather is great. you look like you're having a great time. so happy new year to you. >> happy now year -- new year. and the weather is absolutely balmy. they're expecting a low around midnight in the 40s.

almost unheard of. that's drawing an enormous crowd. as are some of the guests, justin bieber, lady gaga could be bringing out one of the youngest cause they've seen in a long time. definitely a big party and don't forget security. that's an enormous part of this night. >> rick: you mentioned people can't bring in their backpacks and i was reading that if anybody has a purse, if a woman is carrying a purse, that all of that is subject to search. have you been able to see anything from your perch there, any problems with security or is it pretty orderly? >> we haven't seen any problems. they really have this down after doing it for so many years. but there is absolutely searches for your bags as you came in here to times square, there are sharpshooters in the roofs, plain clothed officers and lots of uniformed officers. so there is an enormous presence out here. the police commissioner says there have been no direct threats against new york city or times square, but they certainly don't take any chances on this night. so you're going to see a lot of

officers out here, too. >> arthel: lot of officers with the revelers and they're being very behaved because everybody wants to have a good time. you have about a million people into that small area there. and seems like everybody is orderly and just want to have a healthy and happy celebration, right? >> yes. absolutely. they did poll, and people say they're very optimistic heading into the new year, too. >> rick: thank you, jennifer. jennifer davis in times square. i could have had new year's eve in times square, the most amaze thing is after the ball drops, how quickly it empties out. and they bring in these giant machines and they clean the place up. and i kid you not, by like 2:00 a.m., you would never know that there were a million people there. anyway, tune in tonight for a fox news channel's all american new year hosted by bill hemmer and megyn kelly, live coverage of the party, live from times square beginning at 11:00 p.m. eastern time. >> arthel: happy new year to you. >> rick: happy new year to you, my friend.

happy and healthy new year. thank you for joining us, everybody. >> arthel: stick around. fox report, harris faulkner coming up next. enjoy your new year. be safe and healthy and happy. bye.